In May Philips agreed to sell its stake to private equity-backed CBay Systems Holdings Ltd., a holding company with a portfolio of medical investments. S.A.C. Private Capital Group LLC and Lehman Brothers Inc. have agreed to invest $123 million in CBay.
But in his suit, Schwarz, who was installed in December as one of
three independent directors on MedQuist's seven-person board, contends
that Philips, the controlling shareholder of MedQuist, caused the
company to accept a sale that is not in the best interest of
shareholders. As a result, Newcastle's suit argues, Philips violated
its fiduciary duty to minority MedQuist shareholders. - Ron Orol
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Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.
